India-EU FTA: Grave Implications of Unrestrained Investments

By Kavaljit Singh | Commentary | September 20, 2011

Under the proposed India-EU free trade agreement, the European Commission (EC) has sought an expansive mandate to negotiate on investment issues on the behalf of the European Union. On January 20, 2011, the EC officially made recommendations to the European Council seeking modifications in the negotiating directives for the trade agreement with India. If these recommendations are accepted, the EC would pursue comprehensive cross-border investment liberalization and protection provisions under the proposed free trade agreement with India. The EC document calls for the “progressive abolition of restrictions on investment, with the aim to ensure the highest level of market access.” Since 2007, India and EU…

Read More |

Taming the “Wild West” of Microfinance

By Kavaljit Singh | Commentary | December 24, 2012

The recent suicides by over 60 poor borrowers in the Indian state of Andhra Pradesh have brought the operations of microfinance institutions (MFIs) under public scrutiny. It is well documented by both print and electronic media that these debt-driven suicides were due to coercive methods of loan recovery used by commercial MFIs. The commercial MFIs operate as profit-making non-banking financial corporations (NBFCs) in India.

The majority of suicides took place in Warangal district of Andhra Pradesh and as many as 17 borrowers of SKS Microfinance were among those who reportedly committed suicide. For the past few months, the SKS Microfinance (the largest commercial MFI in India) has been in the news. In August 2010,…

Read More |

Will G20 Take Collective Stand on Capital Controls?

By Kavaljit Singh | Op-Ed, The Korea Times | November 10, 2010

Leaders of the G20 will meet in Seoul on Nov. 11 and 12 to discuss a myriad of issues concerning global financial stability and economic recovery. In many ways, the G20 Seoul Summit is significant because for the first time it is hosted by a non-G8 nation and one in Asia too. The two-day Seoul summit covers an expansive agenda, ranging from global safety nets to new rules on bank capital and liquidity requirements to reforming the International Monetary Fund (IMF).

It remains to be seen how much of this agenda could be accomplished given the sharp differences among G20 member countries on key issues. The summit is likely to be overshadowed by the…

Read More |

A Question of Sovereignty: Capital Controls Gain Credence

By Kavaljit Singh | Journal of Regulation and Risk North Asia | Summer/Autumn 2010

In June 2010, South Korea and Indonesia announced several policy measures to regulate potentially de-stabilising capital flows which could pose a threat to their economies and financial systems. South Korea kicked off the process on 13 June when it announced a series of currency controls to protect its economy from external shocks. The new currency controls are much wider in scope than foreign exchange liquidity controls announced earlier in 2009. Indonesia quickly followed suite on 16 June when its central bank deployed measures to control short-term capital inflows.

The policy measures introduced by South Korea’s central bank have three major components, these being: restrictions on currency…

Read More |

Emerging Markets Consider Capital Controls to Regulate Speculative Capital Flows

By Kavaljit Singh | Commentary | July 3, 2010

Just days before the G20 summit in Toronto, South Korea and Indonesia announced several policy measures to regulate potentially destabilising capital flows which could pose a threat to their economies and financial systems. The policy measures announced by South Korea and Indonesia assume greater significance because both countries are members of the G20. In 2010, South Korea chairs the G20.

On 13 June 2010, South Korea announced it would be imposing currency controls which are much wider in scope than foreign exchange liquidity controls announced earlier in 2009. The policy measures have three major components:

First, there are new restrictions on currency derivatives trades, including non-deliverable currency forwards, cross-currency swaps and forwards. New ceilings have been imposed on domestic banks and branches…

Read More |